Investors in Greek government bonds who held credit default swaps (CDS) against loss on holding those securities will be able to claim some of their money back after the recent restructure of the country's debt triggered a 'credit event'.

The International Swaps and Derivatives Association (ISDA), the global governing body for CDS, declared earlier this month a 'credit event' after successful moves by the Greek Government to do a debt exchange at a significant loss to bond holders, some of whom did not agree to the exchange.

A CDS auction was held on Monday this week to determine the recovery rate, which was set at 21.5 per cent by a panel of dealers.

"Market participants who bought protection against a Hellenic Republic default will receive the face value of their bonds in exchange for a payment of 21.5 per cent of face value to protection sellers," said administrator Markit, which held the auction in conjunction with Creditex Group and the ISDA.

The auction's outcome means that sellers of the $3.2 billion in outstanding swaps linked to Greek government debt will pay $2.5 billion in compensation to buyers.

FIIG Securities head of research Justin McCarthy said the auction had little market impact and the result was largely in line with expectations.

Local banks and institutional investors had minimal or no exposure to Greek government debt with most of those exposed being European investors such as French banks.

"With almost two years to get used to the idea, the eventual CDS credit event has had minimal impact from a broad market point of view," McCarthy said.

"Most banks have already written down Greek debt to just 25 per cent of face value in any case.

While some may wind it back a bit further, the drawn out nature of Greece's sovereign debt problems has given banks and insurance companies time to adjust and take the hit over a long time frame," he said.

There was little reaction seen in the sovereign CDS market on Monday following the auction.

"The auction went smoothly with many market participants describing it as a 'non-event', an intentional play on words of credit event," said Markit credit analyst Otis Casey. "CDS spreads for other peripheral sovereigns showed little to no reaction, being quoted just slightly on either side of unchanged from Friday's closing levels."

CDS, which played a major role in both the 2008 financial crisis, are held by investors as a form of insurance and receive a payout if a company or country defaults, or, in this case, restructures debt, at a loss to investors.

This is the second time that a credit event auction has been run to settle swaps linked to the debt of a sovereign nation.

Ecuador was the last government to default and the first to have its debt auctioned in 2008.

"Unfortunately, this is not the end of Greece or Europe's troubles. Many commentators have suggested that after Greece's restructuring and CDS credit event, the focus will shift to Portugal and Ireland, IMF crisis support capacity and the Greek and French elections," McCarthy said.